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'Zerocoin' Add-on For Bitcoin Could Make It Truly Anonymous And Untraceable.

(U//FOUO) Bitcoin – A decentralized, peer-to-peer (P2P) network-based virtual currency – provides a venue for individuals to generate, transfer, launder, and steal illicit funds with some anonymity. Bitcoin offers many of the same challenges associated with other virtual currencies, such as WebMoney, and adds unique complexities for investigators because of its decentralized nature.

Bitcoin is a free and easy to use, open source peer-to-peer electronic cash system that is completely decentralized, without the need for a central server or trusted parties.

Users hold the crypto keys to their own money and transact directly with each other, with the help of a P2P network to check for double-spending. Users can transfer money easily through the Internet, without having to trust middlemen. Third parties can’t prevent or control your transactions.

There's no denying the rise of Bitcoin has been as amusing as it has been interesting. A quasi-anonymous, internet-spawned currency that shoots up to a price of $32 is captivating. But the honeymoon is over and Bitcoin is falling. Fast.

New bitcoin trading site, Coinabul.com, is now accepting bitcoins in exchange for gold. Orders are currently live during the private beta. Coinabul is the only true Bitcoin-to-Gold exchange in the world. Bitcoin is a digital stored value vehicle, able to provide near-instant transaction capability in a global Internet economy. Bitcoin users are able to trade in bitcoins to their national currency via currency exchanges, but for users who prefer to save their money in gold, Coinabul provides instant gold purchasing capabilities.

Over the years, Bitcoin has experienced ups and downs; the currency has been targeted by hackers and thieves and botnets and been victim to more than one embarrassing software glitch. But it has persevered, and this week, one can fairly say that Bitcoin came of age. On Monday, the U.S. Treasury’s Financial Crimes Enforcement Network released its first “guidance” as to how “de-centralized virtual currencies” should fit into the larger regulatory regime under which currencies of all kinds are required to operate.

The federal agency charged with enforcing the nation's laws against money laundering has issued new guidelines suggesting that several parties in the Bitcoin economy qualify as Money Services Businesses under US law. MSBs must register with the federal government, collect information about their customers, and take steps to combat money laundering by their customers. The new guidelines do not mention Bitcoin by name, but there's little doubt which "de-centralized virtual currency" the Financial Crimes Enforcement Network (FinCEN) had in mind when it drafted the new guidelines.

Bitcoin sounds like something from science fiction: A purely digital currency, created by an anonymous hacker, that operates outside the world's traditional banking systems. The four-year-old currency is very real, though, and it's trading an all-time high, tripling in value in the last two months alone. One bitcoin is was worth about $40 U.S. dollars on Tuesday, and surged on Wednesday to nearly $49. That's up from around $13 in January, and 5 cents in 2010, according to Mt. Gox, the bitcoin market's main exchange.

In Kreuzberg, Berlin, virtual currency Bitcoin has expanded off the internet to become a favoured medium of exchange in real shops and bars. Joerg Platzer, the owner of bar Room 77 is helping to establish what he believes to be the world's first Bitcoin local economy.